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Apple shareholder drops lawsuit on preferred stock

Published on NewsOK
Modified: March 1, 2013 at 5:27 pm •
Published: March 1, 2013

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In this Tuesday, Oct. 23, 2012, file photo Apple CEO Tim Cook speaks during an event to announce new products in San Jose, Calif. Apple CEO Tim Cook sought to assure shareholders Wednesday, Feb. 26, 2013, that the company is working on some "great stuff" that may help reverse a sharp decline in its stock price. (AP Photo/Marcio Jose Sanchez, File)

Apple CEO Tim Cook dismissed Einhorn's lawsuit as a "silly sideshow" at an investment conference a few weeks ago and again Wednesday at the company's annual meeting. During a question-and-answer session with shareholders Wednesday, Cook said Apple's board is in "very, very active discussions" about what do with all its cash.

Apple, which is based in Cupertino, Calif., also has said it is considering whether to introduce another proposal that would require a shareholder vote on preferred stock. If another proposal is submitted, it probably wouldn't happen until Apple holds another annual meeting next year.

The company last year instituted a quarterly dividend of $2.65 per share on its common stock in a move that returns about $10 billion annually to shareholders. Apple's cash stash has grown by about $39 billion during the past year as customers bought its products in record numbers.

Despite Apple's success, investors are worried that the company's growth will soon taper off as it contends with fiercer competition in the smartphone and tablet computer market. The company also hasn't introduced a breakthrough product since the October 2011 death of Steve Jobs, Apple's charismatic co-founder and Cook's predecessor as CEO. It's most recent creation, the iPad, came out three years ago, raising concerns that Apple's well of innovation has run dry.

Cook sought to reassure shareholders that Wednesday's annual meeting, telling them that Apple is working on some "great stuff," including some products outside its core line-up of iPods, iPhones, iPads and Mac computers.

That vague promise hasn't excited Wall Street.

Apple's slumping stock fell to a new 52-week low of $429.98 on Friday before rebounding slightly to close at $430.47, down $10.93, or 2.5 percent. The shares hit a record high of $705.07 in September when the iPhone 5 went on sale.